A Houston-based company aims to help motorists pay consistent prices for gasoline at the pump despite market ups and downs.
A web site introduced on Tuesday, www.lovemygasprice.com, works a bit like an insurance policy against price hikes, said company founder and chief executive officer, Geraldo Paulo Manalac.
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"What we strive for is just to make it as simple for the customer as possible," said Manalac, who goes by the initials "GP."
The company requires customers to pay $3.99 a month based on an average of 20 gallons consumed each month over a year.
In return, if per-gallon prices rise above $2.75 in the United States and $3.75 in California - the current averages as determined by the U.S. Energy Information Administration - the company pays the difference to the customer's Pay Pal account that month.
If prices remain even with or fall below those caps, the monthly fee to participate piles up for payback in times of higher prices.
It also uses EIA averages to calculate payouts. For example, if the EIA in July says California's average per-gallon price is $4.25, the company would send $10 to the customer's Pay Pal account that month, or the additional 50 cents for 20 gallons.
The cap in California is higher than elsewhere because gasoline typically costs more there because of state-specific boutique blending requirements that largely prevent importing fuel from other states.
If the motorist uses more than 20 gallons a month, the payback would be less, Manalac said. The company picked that average amount to keep the program simple. It will not and cannot track where and how often motorists fill their tanks.
The cap at the time a customer signs up is good for a year, Manalac said. At renewal time a year later, it could be higher or lower, depending on what the EIA then says is the average price.
The company said customers do not sign contracts and can withdraw at any time after signing up.
(Reporting By Kristen Hays; Editing by Grant McCool)